Thursday, 09 May 2013 16:46

First Southern Automotive Repair Industry Conference Held in Biloxi, MS

The Mississippi Collision Repair Association (MCRA) and the Alabama Automotive Repair Industry Society of Excellence (ALARISE) co-sponsored the first Southern Automotive Repair Industry Conference and Exhibition in Biloxi, MS, on April 26-27.

Presenters included Aaron Schulenburg of SCRS, Rick Leos with Toyota Motors, Ray Gunder and his attorney Brent Geohagen.

The inaugural event was held at the Beau Rivage Casino and Hotel in Biloxi, MS, and kicked off Friday night with a reception and exhibition featuring more than 18 vendors demonstrating their products and services to over 200 attendees from collision repair shops from across the Southeast.

"The event can be best described as an unqualified success, both in terms of information presented and the impressive number of attendees from seven states," said Bill Fowler, MCRA member and president of Bill Fowler's Bodyworks Inc. in Southaven, MS.

On Saturday morning, vendors and collision repair shop owners and managers participated in classroom presentations specific to their respective segments of the industry. While the vendors discussed various approaches to effectively marketing their products, collision repairers enjoyed presentations by Tony Nethery, Business Development Manager for Colormatch, and Mike Ganske, Regional Business Development Manager for PPG.

Fowler reported that Nethery presented information designed to assist the shop in increasing their bottom line by recognizing many of the seemingly insignificant operations and parts that have been referred to as "the forgettables." Items like re-setting electronics, tinting colors, masking interior surfaces, and many other commonly overlooked labor operations, as well as parts typically not considered significant enough to document, like clips, bulbs, and seam sealers, can contribute substantial amounts to sales figure when consistently invoiced. Blueprinting repairs before they commence, instead of simply writing the typical estimate, can streamline the repair process, allowing for increased volume in workload.

Mike Ganske’s discussion, “Leading Change 2013,” gave useful statistical information that made shops more keenly aware of recent changes in the industry as well as some that are coming in the near future to help shops be up-to-date and competitive. According to Ganske, there is currently a $16 billion over capacity in the collision repair business, meaning there are too many shops vying for the same dollar, which will lead to even more shops leaving the marketplace in the near future. Using a figure of $1 million to represent average gross annual sales per shop, 16,000 shops will have to close in order for shops that manage to remain in business to maintain that average. Given that there are currently fewer than 40,000 repair shops in business today, that is an alarming figure and a difficult reality to face. Add to that the increasing complexity of materials and collision avoidance systems being incorporated into vehicles currently under design, and the picture is even bleaker. There will be considerably fewer vehicles that qualify as candidates for repair, resulting in substantially fewer repairs to go around. In addition, substantial investments will have to be made in equipment, training and business management in order for any collision repair shop to remain competitive and viable.

After lunch, Aaron Schulenburg, Executive Director of the Society of Collision Repair Specialists (SCRS), reported on topical issues currently in the industry. The first topic was an overview of concerns surrounding insurance mandated parts procurement programs, such as PartsTrader. Schulenburg spoke to feedback the association has received on how the various programs have been received in various markets.

Schulenburg pointed out that, despite being in place for over a year in some markets, there has still been no evidence presented that the PartsTrader program is providing any of the suggested benefits to collision repairers. Schulenburg's presentation gave an overview of communications from a variety of carriers utilizing different procurement platforms to repair facilities operating under their program, further demonstrating how cumbersome and intrusive these mandated programs can be into the repair business when it comes to managing vendors and parts. In one instance, the carrier recognized the “frustration” repair facilities experienced from being obligated to order a variety of parts from different suppliers in different states.

Schulenburg also addressed the ongoing dialogue between I-CAR and repairer organizations regarding the recognition of OEM published repair procedures as the industry’s standard of repair. His presentation demonstrated the importance of such discussion as Schulenburg pointed to contrasts between “standard” programs in the U.K. and the U.S. In light of recent legislation filed in the U.S. House and Senate seeking to repeal parts patent laws, he additionally gave a slide show presentation illustrating common problems shops experience when procuring both used and aftermarket parts that lead to parts returns. From the audience perspective, the demonstration was very effective at exposing the incredible waste of time and money shops are subjected to when attempting to incorporate unfit parts into the process.

Rick Leos, Toyota Motor Sales Collision Repair Program Developer, previewed the Predictive Estimating Program that could prove to revolutionize the way estimates are written. Under development for years, the program is much more comprehensive in presenting labor operations and parts that have traditionally been overlooked. Leos said additional information is scheduled to be released in June, with a possible roll-out at the end of the year. Interest in the program has been expressed by several other manufacturers and it could prove to be a real game changer in the way estimates are prepared in the future by increasing efficiency and decreasing cycle times.

Steve Lanza with Richfield Associates, and his father Frank gave a joint presentation that focused on improving negotiating skills and the urgent need to change the way shops collect for collision repair materials. Steve has extensively studied the paint and material billing method currently in use and gave the audience solid reasons why a change is needed. He cited the fact that since 2005, shops have experienced a 61.9% increase in the cost of materials while only managing a 27.1% increase in compensation. Steve stressed the need to incorporate one of the material calculating programs currently available and predicted that failure to do so could ultimately lead to the demise of one's business.

Frank Lanza, a repair facility owner from Chagrin Falls, OH, gave a colorful lesson in negotiating skills and related several personal stories about negotiating with insurers. He stressed the importance of never losing one’s temper and being professional at all times. He shared one of his “Frankisms” - when negotiating with insurance personnel, always keep in the back of your mind: “I love you, but I love me more.”

Ray Gunder with his attorney and friend, Brent Geohagen, were the last speakers of the day, addressing a crowded room about taking back the industry. They discussed their journey in taking on the insurance industry in a modern day David-and-Goliath battle to get fair and reasonable resolution to industry wide problems- short pays, steering and rate suppression. Gunder spoke of his days of desperation that led him to believe he had but two choices - take a stand and fight back or close his doors once and for all. Geohagen told the audience of his original skepticism with Gunder's story and observed that few people outside the collision repair industry would believe such an incredible story, one that is all too familiar to people in the industry.

"Gunder's successes are the stuff of legend and he serves as an inspiration to the rest of us. Despite overwhelming adversity, it is possible to prevail. It just takes determination," said Fowler. "It was a perfect ending to a perfect conference."

John Mosley, President of MCRA and owner of Clinton Body Shop in Richland, MI, said the first-ever southern industry event was a big success with outstanding speakers and a great turnout. He especially enjoyed Rick Leos' presentation about the Toyota predictive system and urges all body shop owners and managers not familiar with the new program to do their research, as the new program will be a "game changer." He hopes next year's event will be twice as large.

Steve Plier, acting president of ALARISE, was extremely pleased that the first southern conference turned out to be such a huge success, with repairers coming from Alabama, Florida, Georgia, Louisiana, Mississippi and Tennessee.

"Not only were the attendees from repair facilities pleased and enthused about the conference, but we also received great comments from our participating vendors," said Plier. "To be the first joint effort between two state organizations resulting in a turnout that represented six southern states I feel speaks volumes that repairers are understanding issues must be addressed and the route to change is through awareness and education within and of the industry."

Without the sponsors, Plier said the conference would not have been able to take place. "I would like to very much express my gratitude to the sponsors for their participation for without them the conference would not have taken place."

Sponsors included: Edwards Chevrolet, PPG (Rozars and Automotive Paint Supply), Automotive Color, Gray Daniels, National Coatings Supply, Overnights Part Alliance, Advance Equipment Solutions, All Star Auto Lights, Byrd's Automotive Inc., CARS, ComputerLogic/PMC Logic Inc., DuPont Performance Coatings and O'Reilly's Auto, English Color and Supply, Enterprise, LKQ, Mitchell, The Clip Man, and Urethane Supply Company.

Plans for the 2014 conference are being made for April 11-13 with  state organizations in Georgia, Alabama, Mississippi, Tennessee, and possibly Florida, working together to coordinate the second annual Southern Automotive Repair Industry Conference in Biloxi, MI.

Special thanks to Bill Fowler for providing summary information for this article.

 

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